FCPO: Uptrend Would Not Be The Same Again 24th April 2014

Thursday, 24th April 2014. Palm oil futures retrace after recovering on past Tuesday as slower demand dragged down positive sentiment plus recent weakness on Soy oil price also weighted down its rival product price recovery. Other news to follow.

"-The U.S. stock market ended Wednesday’s choppy session lower, as investors paused for breath after six-straight days of gains on the S&P 500 and Nasdaq Composite. Earnings results from heavyweights Apple Inc. and Facebook Inc. after the closing bell were in focus. Disappointing numbers from home sales and manufacturing data added to cautious sentiment. The S&P 500 SPX -0.22%  ended the day 4.16 points, or 0.2%, lower at 1,875.39. The Dow Jones Industrial Average DJIA -0.08%  closed 12.72 points, or 0.1%, lower at 16,501.65. Defying the general trend, the Dow Transportation Index rose 0.1% to 7,742.26, closing at record level for the second day in a row. The Nasdaq Composite COMP -0.83%  fell 34.49 points, or 0.8%, to 4,161.97."

"-Stocks in Hong Kong fell on signs of further contraction in China’s manufacturing sector, while a rally on Wall Street bolstered Japan in a quiet, holiday-shortened week for regional markets.

A strong session for U.S. stocks that sent the S&P 500 SPX -0.22%  to its sixth-straight positive close drove sentiment in Australia and Japan. The S&P 500 gained 0.4% on Tuesday to 1879.55, notching its longest winning streak since mid-September. A string of upbeat U.S. corporate earnings reports “have again been the perfect distraction from concerning lofty tech valuations,” said Timothy Radford, global investment manager at Australian brokerage Rivkin, referring to a sharp selloff of highflying technology stocks that has rattled global markets over the past month."

"-A U.S. government report showed that weekly crude inventories climbed to their highest level on record, pulling oil futures down by the close to their lowest settlement in more than two weeks. Tensions between Russia and the West over Ukraine continued to feed worries about oil supplies from Russia, analysts said, limiting price losses for oil, however. Crude oil for June delivery CLM4 +0.22% fell 31 cents, or 0.3%, to settle at $101.44 a barrel on the New York Mercantile Exchange. That was the lowest settlement since April 7, based on the most-active contracts. Oil futures were trading at $101.90 shortly before the supply report and prices managed to trade briefly above $102 after it. Brent crude UK:LCOM4 +0.21% , the European benchmark, saw its June contract close at $109.11 a gallon, down 16 cents, or 0.2%, on the ICE Futures exchange."

FCPO- Struggling To Stay Up

Palm oil futures is having hard time deciding which direction to take for the moment. For Long setup, we can either wait for the benchmark July to hit a new weekly high above 2,700 and take action or we would go Long if the market does dropped back to 2,620~2,610 level, taking a small stop loss for a hope that price will hit its previous support and went back up like a science. Unfortunately, market and price movement is not science but rather a momentum crafted by cumulative opinions or thoughts that lead to the action of Buying or Selling. Wherever the price moved, it got nothing to do with certainty nor anyone could be sure where does it go for the next ten seconds. Back to the outlook, palm oil demand will be a major hurdle for the price to recover, sluggish demand leads to higher stockpiles because productions for this quarter is likely consistent. The only lead I can think for the market to recover about 1%~2% further would be looking at its rival product, Soy oil. And again, we are still waiting for Soy oil to give us some positive pointer as it is still hovering on 42.40 per pound, it needs to rise above 43.00 per pound for palm oil to rally above 2,700. Market is still moving within 2,700~ 2,612 range for the moment, in other words, sideways. What you can possibly do within these range would go Long if it went down close to 2,612 level or go Short when it approach 2,700 level. Of course you would need to wager some to gain some. Placing a small stop loss above those high and low is the way to manage your trade, no matter how confident you are. Sideways or lackluster session can provide ample of opportunity when the price approach previous high or low because for small stops, you can leveraged more with better risk and reward ratios. The only downside for this particular technique would be lower percentage for the trade to work out due to small stop losses. Bottom line, that is the game plan for this week, we are still trapped within the sideways walls and there is not much room for the long term trader to place their bet for the moment. Other news to follow.

Daily Pivot Point
R2=2681
R1=2665
S1=2640
S2=2631
 Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.